Bankruptcy can provide a legal lifeline to assist you in resetting and rebuilding when debt becomes too great and no other financial solutions seem feasible. But let’s be honest, registering for bankruptcy could seem frightening. The positive development? It is not required.
Whether you’re battling medical bills, credit card debt, or a sudden loss of income, this step-by-step guide takes you through the bankruptcy process so you can make wise decisions and advance with certainty.
A Step-by-Step Guide Through the Bankruptcy Process
1. Is to Ascertain Whether Bankruptcy Is the Best Choice
First of all, be truthful about your financial status. Not the only means of debt relief is bankruptcy. Sometimes, credit counseling, debt consolidation, or a repayment plan might be enough. Still, if you:
- Being sued by creditors
- Dealing with wage garnishment or foreclosure
- Unable to make even minimal payments
- Drowning in insecure debts like credit cards or medical bills
Then bankruptcy might be the right action. Before deciding, speak with a bankruptcy lawyer; they can clarify your rights and available options.
2: Pick the Appropriate Kind of Bankruptcy
Bankruptcy Under Chapter 7:
- Sometimes known as liquidation bankruptcy
- Releases of mostly uninsured debts
- It might call for the sale of non-exempt assets
- Usually 3–6 months of faster processing
Chapter 13 Bankruptcy: Sometimes referred to as “reorganization”
- Calls for a three to five-year repayment schedule
- Let you retain your assets (such as your car or home)
- Ideal if you have a steady income and wish to catch up on secured obligations
Every choice has benefits and drawbacks; thus, the best one depends on your salary, possessions, and objectives.
3: Register for a Credit Counseling Course
Legally, you must finish a credit counseling course from a certified provider before filing. Usually priced between $25 and $50, it is a one-hour session that may be completed by phone or over the internet. Once finished, you will be sent a certificate to include with your bankruptcy records.
4: Assemble Your Financial Papers
Your lawyer (or the court, if submitting yourself) will need thorough financial records, including:
- Tax returns (last 2 years)
- Proof of income or pay stubs
- Statements from the bank
- loan papers
- credit card statements
- A list of all debts and assets
Getting ready beforehand helps to simplify the process and lower the possibility of delays.
This post was written by Trey Wright, an experienced bankruptcy lawyer in Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A., Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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